Virginia and Cuba discuss expanding trade beyond agriculture

RICHMOND — A top Cuban trade official recently spent three days in
Virginia meeting with business and government leaders eager to
capi­tal­ize on normalizing relations between the United States and the
island nation just off its shores.

The meetings wrapped up a week ago, just as the Obama administration
rolled out regulatory changes aimed at liberalizing trade, banking and
travel policies.

The trade talks went beyond the agricultural products that Virginia has
sold to Cuba for more than a decade under rules loosened to allow
exports of food and medicine for humanitarian reasons.

Tourism and hospitality, ­university-level education, health care and
information technology were part of the recent discussions, according to
Todd Haymore, Virginia’s secretary of agriculture and forestry, who took
part.

Details of the meetings remain under wraps. Haymore confirmed that they
took place in locations around the commonwealth, at the Port of
Virginia, in Northern Virginia and in the central part of the state.

But he said he was not at liberty to disclose the names of businesses
trying to establish a foothold in Cuba. He also declined to identify the
Cuban trade official, saying that should come from the Cuban Embassy in
Washington. The embassy did not respond to messages seeking comment.

The goal of the talks was to build on the trade that Virginia has
established through sales of soybeans, apples, poultry and pork going
back a dozen years, Haymore said. Those sales have already made Virginia
Cuba’s third-largest U.S. trading partner, behind Louisiana and Georgia.
State business and government leaders have said that they are poised to
capi­tal­ize on expanded trade opportunities if the Cuban trade embargo
falls further by the wayside.

“We’re finally starting to see a move toward normalization after decades
of strained relations, and Virginia’s standing right at the front of the
line, or very close to the front of the line, to take advantage of the
new opportunities,’’ Haymore said.

Gov. Terry McAuliffe (D), who has made economic development the
centerpiece of his governorship, started pushing to expand trade in Cuba
even before the recent diplomatic thaw between the two countries. The
governor and Haymore traveled to Washington late last year to visit with
José R. Cabañas, then chief of the Cuban Interests Section.

McAuliffe invited him to visit Richmond, and Cabañas took McAuliffe up
on the offer in January. It marked the first time that the diplomat had
been the guest of an American governor. About a month before the meeting
took place, Obama announced plans to reset the country’s relationship
with Cuba.

Even so, relations between Cuba and the United States remained so far
from normal that when Cabañas made his visit, he had to get the State
Department’s permission to travel outside the Beltway.

Since then, Cabañas’s title has changed to ambassador because both
countries have reopened their embassies. The trade official who visited
a week ago did not need the State Department’s permission to venture
beyond the Beltway, but he still needed to inform U.S. officials of his
travel plans.

When Cabañas returned to Richmond in March for an agricultural trade
conference, McAuliffe announced that he would lead a trade mission to
Cuba. The mission has yet to take place. Haymore said it remains in the
works for late this year or early in 2016.

Virginia governors have been trying to get a piece of the Cuban market
since Mark R. Warner (D) became governor in 2002. Warner, now a U.S.
senator, dispatched his commerce and trade secretary to the island,
taking advantage of liberalization allowed when President Bill Clinton
signed the Trade Sanctions Reform and Export Enhancement Act.

Warner’s move helped Virginia farmers sell about $800,000 in apples and
soybeans to Cuba in 2003 — the first exports from Virginia to Cuba since
President John F. Kennedy imposed a Cold War trade embargo in 1962.
Annual trade missions and other outreach continued under governors
Timothy M. Kaine (D), Robert F. McDonnell (R) and McAuliffe, with sales
peaking at $66 million a year in 2011 before Cuba’s souring economy
forced cutbacks.

Banking restrictions have compounded those economic problems, and the
value of Virginia’s agricultural trade with Cuba has dropped
substantially since then — to $40 million in 2013, and $25 million in 2014.

Obama’s recent regulatory changes could help by allowing certain U.S.
businesses to open bank accounts in Cuba. But it remained unclear
whether Cuba will change its policies to allow the looser U.S. policies
to take effect. It is also uncertain whether Obama’s actions will
withstand possible challenges from the members of Congress who have
questioned his authority to make them.

“Normalization has created many new ways for Virginia companies to
engage in authorized commercial activities in Cuba,” said Matthew Aho, a
New York-based consultant on Cuba matters at the law firm Akerman.

“The commonwealth’s long history as a trade partner in agricultural
goods should give Virginian businesses an edge; the question now is how
aggressively companies will work to take advantage of the recent U.S.
policy changes.”

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